"Daddy puts on your bras sometimes," my then 4-year-old said nonchalantly as I tried on lingerie in a department store dressing room.

"Excuse me? When?" I asked, astonished.

"When you're asleep," she replied—and proceeded to describe how, early Saturday mornings, he'd slip a bra over his T-shirt and then jump on our mini-trampoline. She stuck to her tale so adamantly that later that day, I sheepishly asked my schoolteacher husband if he'd ever jokingly held one of my lacy underthings up to his chest (he hadn't).

We laughed, but I felt unsettled. Lying to avoid punishment or to get an extra piece of pie—that I could understand. But Lillian was lying frequently, for kicks, and she'd never admit that a made-up story wasn't true. Should I insist on honesty, I wondered, lest she develop into a pathological liar? Or let it slide, to avoid crushing her creativity?

The latter, apparently: The experts I quizzed about Lillian's tale were unfazed. "There's nothing wrong with her telling it," says Michael Brody, M.D., a child psychiatrist in Potomac, Maryland. "Very young kids don't know the difference between truth and fiction."

In fact, this type of lying can be a sign of good things. "Preschoolers with higher IQ scores are more likely to lie," says Angela Crossman, Ph.D., associate professor of psychology at John Jay College of Criminal Justice in New York, who researched the subject. Early lying proficiency may also be linked with good social skills in adolescence.

Of course, not all kids' lies are trivial incidents you can just laugh off—and you do want to raise a child who values honesty. Knowing the types of untruths kids tell at each stage, and why, can help you gently guide your own toward a level of truthfulness that's appropriate for his age.

Toddlers: first fibs

It's usually pretty obvious when one of Eric Lutzker's 2-year-old twin boys, Merce and Jacob, has a dirty diaper. The trick is determining which one. "If you ask them, they'll each simultaneously say the other's name," says the Seattle dad. "They don't want to go through the rigmarole of a diaper change, so they lie about it."

Such self-serving fibs are the first kinds of lies many young toddlers try out. As any mom of a toddler or preschooler can tell you, kids as young as 3—sometimes even 2—will tell very simple lies, denying they've done something or in order to gain something for themselves.

It doesn't make sense to punish toddlers for truth bending, since they don't get that what they're doing is wrong. "If a two-year-old pulls the cat's tail and says that her imaginary friend did it, the best response is to say, 'The cat has feelings, too,' " says Elizabeth Berger, M.D., a child psychiatrist and author of Raising Kids With Character. "Don't get into a wrangle to get the child to admit that she was the one." An even better strategy is to avoid the showdown in the first place. "Rather than asking 'Did you break the vase?' say, 'Look, the vase got broken,' " says Dr. Brody. "If you make an angry accusation, you'll get a lie."

Preschoolers: small people, tall tales

My daughter's story about her dad wearing a bra is typical of 3-to 5-year-olds' freewheeling relationship with reality. This is the age of invisible friends, horned monsters and talking rainbows. Though she recently outgrew them, 4-year-old Lucy Sterba of El Cerrito, California, basked last year in the companionship of not one, but eight imaginary sisters, each with a name, birth date and backstory. "The sisters did things Lucy couldn't do, like wear pink dresses every day," says her dad, Chris.

Preschoolers' tall tales can be pure play, or sometimes wishful thinking (Lucy's pretend sisters never had to eat mushrooms the way Lucy does, her mom notes). And it's not unusual for young kids to insist, as Lucy did, that their fantasy world is real. "It's not really a lie," says Dr. Berger. "What your child indicates when he says 'He's real' is the tremendous colorfulness, prominence, and importance of his imaginary friends."

If a particular tall tale troubles you, it's important to keep things in perspective. "If a child seems happy and has realistic relationships with the important people in his life, I would not be worried about his fantasizing. That's what children did before there was TV," Dr. Berger says. Remember that what seems outlandish to adults may simply be a child's way of processing new ideas. After Lucy learned that her grandfather had died before she was born, several of her "sisters" suddenly died, too. "She would talk about it in a very matter-of-fact way," Sterba says. "Our friends started to joke that there must be an epidemic."

Schoolkids: they've got their reasons

Shea McMahon, 8, and his brother Jack, 6, of Austin, Texas, both denied pilfering their sister's hospital newborn bracelet from a keepsake box. "I yelled and cajoled and said no Sunday breakfast for either one until they confessed," says Shannon McMahon. A few minutes later, Jack owned up. But when his mom asked for details, he panicked. "Finally, he admitted, 'I got nothin'. I just wanted you guys to stop asking,' " she says. Then Shea, the real perp, burst into tears.

Jack's attempt to take the rap for his big brother signals an important developmental step: the ability to tell a white (or "prosocial") lie—one that benefits someone else or is told to avoid hurting someone's feelings. "It actually shows a bit of social awareness and sensitivity," says Crossman.

But as Shea's fib by omission shows, 5-to 8-year-olds also still occasionally resort to the not-so-white lie. Kids this age do so for all sorts of understandable, even forgivable, reasons—for example, they're afraid of how disappointed you'll be or the punishment they'll get, even because they're pressed beyond their capabilities. (If, say, a kid's having trouble with math, he might insist he has no math homework.) Before you send your child to his room or take away his TV privileges for the day, try to find out what drove him to lie, and take his reasons into consideration.

Tweens: growing fast and stretching the truth

When we had a Halloween party for my older daughter, Aurora's, third-grade class, my husband made up a ghost story about "the rundown house up the block." At the end, the girls cried, "Can we go see it?" At 9, they'd developed concrete ideas of truth and falsehood but were still naive about the gray area in between.

And speaking of gray areas, tweens are also apt to gloss over details of their lives they once freely spilled about. Don't be surprised if your child keeps mum about things she would have shared with you a year or two before, like the latest lunch-table gossip. This new secretiveness isn't dishonesty or a sign that your child is up to anything wrong. In fact, it reflects her growing maturity. "Kids who tell everything to their parents at age thirteen or fourteen are not growing up," says Dr. Brody.

Of course, as your child gains more independence, he may take advantage of it by pulling a fast one from time to time. When 9-year-old Joey DeMille of San Diego asked his mother to stop "nagging" him about completing his daily reading log, she agreed to back off and let him take responsibility. "For the entire month of January, I didn't ask him to show me his log," she says, and Joey swore that he was filling it in daily. But when the time came to turn in the log, his mother was shocked to discover that it was nearly blank. "He had been lying to me all month long!" she says.

An occasional lie about homework, chores or toothbrushing, while aggravating, is not unusual at this age. The best response usually is to simply express your displeasure. But if a tween lies chronically, he might need professional assistance to sort things out. "Children who are anxious, who feel that they can't handle some kind of situation, may lie," says Dr. Berger. "It could be a sign of any number of stresses that the child is under." It could also be the sign of a smart kid who finds lying a convenient tactic.

The best way to steer your tween toward greater honesty? Set a good example yourself (no fudging his younger brother's age to get cheaper movie tickets) and talk to him about how lying can damage your credibility and relationships. "It's the kind of lesson that doesn't sink in immediately," says Crossman. What lesson ever does, especially with kids that age? But chances are your child will grow out of his fibbing—and into an honest-to-goodness adult.

Juliette Guilbert, a mother of two, lives near Seattle and is currently working on a book about kids and drug use.